Innovative Public-Private Partnerships Could Help Grow Mini Grid Sector
Did you know that in Africa, 600 million people are still without access to electricity? Distributed energy companies are the answer to the electricity shortage Link, and mini-grids have for a long time been viewed at the key to increasing electricity access. Several barriers remain to accelerating the diffusion of minigrids, one of them being the demand stimulation, where developers often struggle to get enough consumption in their minigrids to support viability.
The AMDA “benchmarking Africa’s minigrids Report” says the average consumption per customer is only 6.1 kWh per month across the continent, and that low consumption makes it difficult to ensure a return on investment or that operational costs are covered. A potential avenue for improving project viability is to bundle in electric mobility services like such as electric two and three wheelers. These will solve two main challenges simultaneously, that is access to reliable transport services in these rural areas as well as improving the business case of minigrids.
Private start-ups and donor agencies have traditionally taken the initiative to reaching out to underserved communities. These start-ups generally do not have the same level of public funding and backing enjoyed by traditional utilities Link. This has helped them develop innovative business models as well as technology platforms in search of financial sustainability Link. Smart partnerships between these start-ups and national utility companies could help unlock this industry.
During an address at the University of Pretoria last week, Eskom CEO, Andre de Ruyter said that “ Eskom will also use microgrids to provide electricity to the 13% of South Africans who are not currently connected to the grid.” Its really good to see a national Utility company such as Eskom prioritising minigrids. “Our pilot micro-grid project has yielded positive results. Electricity is a catalyst for development and dignity – we cannot leave anyone behind” added de Ruyter. Eskom has been piloting a 32 kW/ 90 kWh solar-powered microgrid at Wilhelmina Farm, Ficksburg in the Free State Link. DPA through Ugesi is working on several mini-grid projects in Southern Africa and welcomes Eskom’s initiative on microgrids to electrify the region. Find out more on how you can partner with us at email@example.com or firstname.lastname@example.org!